STLTECH - Sterlite Tech.

📊 NSE: STLTECH 🏢 Cables - Telephone 📅 Last Updated: 12/14/2025 13:44

💰 Financial Performance

Revenue Growth by Segment

H1 FY26 revenue grew 6% YoY to INR 2,054 Cr from INR 1,946 Cr. Q2 FY26 revenue was INR 1,034 Cr. STL Digital reported Q2 FY26 revenue of INR 65 Cr, up from INR 64 Cr in Q2 FY25.

Geographic Revenue Split

The company has a global presence across 4 continents and 100+ countries. Recent margin improvements were driven by a higher mix of orders from the US and Europe, though US government tariffs have created headwinds.

Profitability Margins

H1 FY26 PAT improved to INR 14 Cr from a loss of INR 62 Cr in H1 FY25. PAT margin for FY25 was -3% post-demerger. Operating margins are expected to recover toward the 15-17% range as capacity utilization improves.

EBITDA Margin

Q2 FY26 EBITDA margin stood at 13.6% (INR 141 Cr), a significant improvement from 11.1% (INR 119 Cr) in Q2 FY25. H1 FY26 EBITDA grew 46% YoY to INR 281 Cr.

Capital Expenditure

Planned CAPEX outlay for the current year is approximately INR 115 Cr, primarily focused on R&D and optical business capabilities.

Credit Rating & Borrowing

CRISIL and ICRA maintain ratings with a 'Stable' outlook. Interest coverage was 1.9x for FY25, improving to 2.8x in Q1 FY26. Net Debt to EBITDA improved to 2.33x in Q2 FY26.

⚙️ Operational Drivers

Raw Materials

Optical Fiber (OF) and raw materials for Optical Fiber Cable (OFC) manufacturing. Specific material names and percentages are not disclosed, but a spike in raw material costs was cited as a margin drag in FY25.

Capacity Expansion

Sizeable manufacturing capacities across 4 continents. Current utilization is low, but margins are expected to improve as utilization increases to meet demand from US and India projects.

Raw Material Costs

Raw material costs and higher channel inventory in North America materially lowered FY25 margins to 10.4% compared to the historical average of 20.5%.

Manufacturing Efficiency

Capacity utilization is currently a key monitorable; under-absorption of fixed costs due to low utilization has previously constrained profitability.

📈 Strategic Growth

Expected Growth Rate

Growth Strategy

Growth will be achieved through the BEAD programme in the US and BharatNet Phase III in India, expected to start delivery in Q2 FY2027. The strategy includes cost optimization, gaining market share in the Optical business, and scaling the STL Digital segment.

Products & Services

Optical Fibers (OF), Optical Fiber Cables (OFC), 5G wireless technology, Fibre to the 'X' (FTTx), enterprise and data center networks, and digital transformation services.

Brand Portfolio

STL, STL Digital.

New Products/Services

Launched an AI Center of Excellence (COE) and focusing on building capabilities in AI-driven solutions and customer Proof of Concepts (POCs).

Market Expansion

Targeting the US market via the BEAD programme and the Indian market via BharatNet Phase III. Global expansion continues across 100+ countries.

Market Share & Ranking

Leading manufacturer of OFs and OFCs in the Indian market with a strong global market position.

Strategic Alliances

Acquired Mettalurgica Bresciana (Italy) and Clearcomm Group (UK). Maintains a 50% JV in Sterlite Conduspar Industrial Ltd.

🌍 External Factors

Industry Trends

The industry is growing at approximately 6% and is shifting toward 5G, rural broadband, and AI-integrated networks. STL is positioning itself as an end-to-end solution provider from fiber manufacturing to software.

Competitive Landscape

Faces intense competition from large global players with diversified manufacturing bases.

Competitive Moat

Moat is built on an integrated value chain (preform to software) and global manufacturing scale. This is sustainable due to high entry barriers in preform manufacturing and long-term customer relationships.

Macro Economic Sensitivity

Highly sensitive to interest rates, which create pressure on demand, and global telecom capex cycles.

Consumer Behavior

Shift toward high-speed data and 5G is driving demand for high-density optical fiber networks.

Geopolitical Risks

US government tariffs on fiber imports are a major risk, mitigated partly by STL's local manufacturing plant in the US.

⚖️ Regulatory & Governance

Industry Regulations

Subject to US import tariffs and international trade regulations. Compliance with ISO 27001 for data security and social accountability standards.

Environmental Compliance

CSR initiatives like Swashthya Suraksha have impacted 27 lakh lives through hybrid healthcare programs.

Legal Contingencies

A $96.5 million (approx. INR 810 Cr) jury verdict was awarded to Prysmian against STL’s US subsidiary for alleged non-compete violations and trade secret use. The matter is currently under appeal.